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During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking statements, and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the Securities and Exchange Commission for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter.In addition, we will also refer to non-GAAP financial measures, such as EBITDA, adjusted EBITDA and adjusted net income or loss. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted on our website at huntsman.com. Let's turn to Slide 2. In our earnings release this morning, we reported second quarter 2012 revenue of $2,914,000,000, adjusted EBITDA of $365 million and adjusted earnings per share of $0.58 per diluted share. Our adjusted EBITDA was $365 million in the second quarter 2012 compared to $321 million in the prior year, an increase of 14%. I will now turn the call over to Peter Huntsman, our President and CEO. Peter R. Huntsman Thank you, Kurt. Good morning, everyone. Thank you for joining us. Let's turn to Slide #3. Adjusted EBITDA for our Polyurethanes division in the second quarter 2012 was $170 million, an improvement of $27 million compared to the prior year of $143 million of adjusted EBITDA. The increase in earnings was entirely attributed to improvements in our MDI urethanes volumes and margins. Sales volumes for our MDI products increased 12% compared to the prior year. We are encouraged by the strong growth in demand from our largest end markets: insulation, adhesives, coatings, elastomers and composite wood products, all of which grew at double-digit rates compared to the prior year. Despite economic concerns that dominate current headlines, sales volumes in Europe improved 15% compared to the prior year and 9% compared to the prior quarter. Most of this growth came in Northern Europe, where sales volumes for our MDI products improved 14%, whereas Southern Europe grew only 1% compared to the prior year.
During the quarter, we successfully raised our MDI selling prices, which, combined with stable benzene costs, had the effect of increasing our contribution margins. Recently, benzene costs have spiked in the U.S., primarily as a result of regional supply dislocation. We believe this will rebalance in the near term and pricing will moderate, but it will be a slight headwind in the third quarter. Overall, the margin expansion we enjoyed in the second quarter will be sustained in the second half of 2012 as utilization rates continue to tighten. Propylene oxide and our coproduct MTBE continue to perform very well, primarily as a result of an attractive spread between premium gasoline and lower-priced raw materials. Earnings for this product were in line with the previous year and decreased approximately $40 million compared to the first quarter when industry supply outages led to exceptional margins. In July, we suffered an unplanned outage at our PO/MTBE facility due to a lightning strike. This facility is back up and running now, but the repairs and lost production will have an approximate EBITDA impact of $10 million in the third quarter.Let's turn to Slide #4. In the second quarter, our Performance Products division earned $85 million of adjusted EBITDA. During the second quarter, we experienced an unplanned outage at our ethylene oxide unit, which reduced our EBITDA by approximately $5 million. We have elected to delay our previously announced third quarter planned maintenance on this unit until the first quarter of next year to coincide with our planned polyolefins cracker maintenance. Although the second quarter contribution margins for some of our amines was low, we expect an improvement in the third quarter as the lower cost of ethylene and propylene work their way through the value chain of these products. Further, the lower cost of benzene should benefit our maleic anhyride business. We are encouraged by early demand trends within the business as order patterns have been strong thus far. As a result of the planned maintenance postponement, we expect third quarter earnings to be slightly higher than the second. Read the rest of this transcript for free on seekingalpha.com